M/s. Nilo Plast, Baroda V. The Income tax Officer,Ward-2(2), Baroda

ITA 2237/AHD/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6745 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-03-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 28-05-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: U S RAINA SRDR
• Assessee Lawyers: M G PATEL
• Keywords: Rejection of books of accounts; Business income; Corroborative evidences
• Section: 191; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.N.PHAUJA, HONBLE ACCOUNTANT MEMBER ITA NO.2237/AHD/2007 ASSESSMENT YEAR:2003-04 DATE OF HEARING:15.3.11 DRAFTED:15.4.11 M/S. NILO PLAST, 234, GIDC MAKARPURA, BARODA PAN NO.AABFN5987C V/S. INCOME TAX OFFICER, WARD-2(2), BARODA (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M.G. PATEL, AR RESPONDENT BY:- SHRI U.S. RAINA, SR-DR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX(APPEALS)-II, BARODA IN APPEAL NO.CAB/II- 188/06-07 DATED 01-03- 2007 FOR THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-II, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ADDITION TO THE TOTAL INCOME BY WAY OF SALES OUT OF UNDISCLOSED PRO DUCTION ESTIMATED ON THE BASIS OF ELECTRICITY CONSUMPTION. ITA NO.2237/AHD/2007 A.Y. 2003-04 M/S.NILO PLAST V. ITO WD-2(2), BRD PAGE 2 3. THE ONLY ISSUE IS INVOLVED IN THIS APPEAL RELATE S TO ADDITION OF RS.15,92,461/- ON ACCOUNT OF SALES OUT OF UNDISCLOS ED PRODUCTION. THIS ISSUE HAS BEEN DEALT WITH AT PAGES 3.TO 9 OF THE ASSESSME NT ORDER. A CHART OF PRODUCTION AS PER PAGE 3 OF ASSESSMENT ORDER WAS PR EPARED BY ASSESSING OFFICER ON THE BASIS OF INFORMATION FURNISHED BY AS SESSEE DURING THE ASSESSMENT PROCEEDINGS. WHEN ASKED TO EXPLAIN THE V ARIATION IN THE MONTH- WISE PRODUCTION VIS--VIS CONSUMPTION OF POWER THE ASSESSEE GAVE A REPLY OF GENERAL NATURE WITHOUT ANY SUPPORTING EVIDENCE. IT WAS ALSO NOTICED BY THE ASSESSING OFFICER THAT THOUGH DETAILS OF PRODUCTION WERE GIVEN IN THE AUDIT REPORT, NO AUDIT COULD HAVE BEEN CONDUCTED BY THE A UDITOR SINCE NO RECORDS WERE ADMITTEDLY MAINTAINED BY THE ASSESSEE AND IT W AS ALSO ADMITTED BY ASSESSEE THAT PRODUCTION FIGURES FURNISHED BY ASSES SEE DURING THE ASSESSMENT PROCEEDINGS WERE PURELY ON ESTIMATE BASI S. FOR THIS PURPOSE, THE AO RELIED ON ASSESSEES LETTER DATED 21-03-2006, TH E RELEVANT PORTION OF WHICH WERE EXTRACTED BY HIM AT PAGE-5 OF THE ASSESSMENT ORDER. UNDER THESE FACTS AND CIRCUMSTANCES AO INVOKED THE PROVISION OF SECTI ON 145 OF THE I.T. ACT, RELEVANT PORTION OF ASSESSMENT ORDER IS AS UNDER:- V. NOW, THE INFORMATION AVAILABLE ON RECORD THAT I S FILED BY THE ASSESSEE WITH ITS RETURN AND ALSO SUBMITTED LATER O N DURING THE COURSE OF HEARING WAS EXAMINED WITH REFERENCE TO VARIOUS CLAI MS MADE BY THE ASSESSEE. AS DISCUSSED ABOVE VIDE REPLY DATED 21.03 .2006 THE ASSESSEE IN CLEAR TERMS HAS ADMITTED THAT THE PRODU CTION GIVEN BY IT DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS PUR ELY ON ESTIMATE BASIS BECAUSE NO DAY TO DAY STATE IS BEING MAINTAIN ED. I HAVE TRIED TO VERIFY THE FIGURES SUBMITTED BY THE ASSESSEE WITH T HE RETURN AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE HAS FIELD AN AUDIT REPORT WITH THE RETURN WHICH RUNS INTO 32 PAGES. TH E PAGE NUMBERS ON THE AUDIT REPORT ARE PUT BY THE AUDITORS IN THEIR O WN HAND, IN BLACK INK. PAGE NO.216 OF THE AUDIT REPORT GIVES THE DETAILS O F PRODUCTION. VERY FIRST TWO ITEMS OF THIS PAGE ARE EMITTER 3.8 1PH AN D EMITTER 8. 1PH AND PRODUCTION OF THESE TWO ITEMS HAS BEEN SHOWN AT 464 00 AND 54000 RESPECTIVELY. VIDE LETTER DATED 09.03.2006 THE ASSESSEE HAS SUPPLIED THE FIGURES FOR THE MONTH-WISE PRODUCTION AND THE P RODUCTION OF ABOVE CITED THESE TWO ITEMS HAS BEEN SHOWN AS BELOW: ITEM JUNE 2002 AUGUST OCTOBER NOVEMBER JANUARY 2003 TOTAL 3.8 1PH 15000 - 1400 30000 - 46400 ITA NO.2237/AHD/2007 A.Y. 2003-04 M/S.NILO PLAST V. ITO WD-2(2), BRD PAGE 3 8.1 1PHS - 2000 - 21000 31000 54000 A. AS DISCUSSED ABOVE VIDE LETTER DATED 21.03.2006 THE ASSESSEE HAS ADMITTED THAT THE ABOVE FIGURES ARE GIVEN BY IT ON ESTIMATE BASIS THAT MEANS THE AUDITORS DID NOT HAVE REAL ACCOUNTS IN HA ND AT THE TIME OF AUDIT. ACCORDINGLY NO AUDIT OF ACCOUNTS WAS EVER CO NDUCTED BECAUSE NO RECORDS FOR THAT WERE EVER MAINTAINED BY THE ASSESS EE. FURTHER, IT IS ALSO CLAIMED THAT FROM APRIL TO AUGUST THE ASSESSEE IS DOING TRIAL RUN. THIS CLAIM OF THE ASSESSEE DOES NOT FIND SUPPORT FR OM THE FIGURES OF PRODUCTION AS THE PRODUCTION DURING THIS PERIOD IS 17625.700 AS AGAINST 63189.610 FOR REST OF THE PERIOD. THE WHOLE DISCUSS ION MADE ABOVE GOES TO PROVE THAT NO AUDIT ON THE BASIS OF RECORD WAS EVER CONDUCTED FOR WHICH PENALTY PROCEEDINGS 271B IS INITIATED AGA INST THE ASSESSEE. VI. THE ASSESSEE WAS SUPPLIED WITH THE CHART FOR PR ODUCTION PREPARED BY THIS OFFICE AND THE ASSESSEE WAS ASKED TO EXPLAI N THE VARIATION IN THE MONTH WISE PRODUCTION VIS--VIS CONSUMPTION OF POWE R. THE ASSESSEE HAS GIVEN FOLLOWING REASONS VIDE REPLY DATED 21.03. 2006: A. DURING OFF SEASON, TRAILS ARE TAKEN FOR NEW PROD UCT RANGE WHERE PRODUCTION MAY BE NIL BUT UNITS WILL BE CONSUMED. B. POWER FAILURE, MINOR BREAK DOWN, ETC. C. SUB-STANDARD MATERIALS USED. D. DIFFERENT PRODUCTS WILL HAVE DIFFERENT POWER CON SUMPTION DEPENDING PRIOR TO ITS VIDE REPLY DATED 09.03.2006 THE ASSESS EE HAD CATEGORICALLY ADMITTED THAT NO RECORDS OF WORKING H OURS OF EACH MACHINE WERE MAINTAINED. NOW, I REVERT BACK TO THE REASONS GIVEN BY THE ASSE SSEE FOR VARIATION OF PRODUCTION. PARA WISE DISCUSSION IS AS BELOW: A NO TRIAL PRODUCTION IS ESTABLISHED WITH THE HEL P OF DOCUMENTARY EVIDENCE AS DISCUSSED ABOVE. THE PRODUCTION RATIO I S 17:63 FOR THE OFF SEASON AND MAIN/PEAK PRODUCTION SEASON. THIS RA TIO DOES NOT SUPPORT THE CLAIM REGARDING TRIAL PRODUCTION OF THE ASSESSEE. B IN GUJARAT PARTICULARLY THERE IS NO POWER FAILUR E AS CLAIMED BY THE ASSESSEE. SO FAR THE BREAK DOWN IS CONCERNED TH E ASSESSEE ITSELF HAS ADMITTED THAT NO RECORD OF EACH MACHINE IS MAINTAINED THEREFORE BREAK DOWN IS NOT ESTABLISHED FROM THE RE CORDS. ITA NO.2237/AHD/2007 A.Y. 2003-04 M/S.NILO PLAST V. ITO WD-2(2), BRD PAGE 4 C THE ASSESSEE HAS NO WHERE SUPPLIED THE DETAILS O F COMPARATIVE FIGURES TO ESTABLISH THE SUB-STANDARD MATERIAL WAS EVER USED. NO PRUDENT BUSINESSMAN WILL USE SUB-STANDARD MATERIAL BECAUSE IT WILL DIRECTLY AFFECT THE QUALITY OF PRODUCT, ULTIMATELY GOODWILL IN THE MARKET. NOBODY WOULD LIKE TO EARN BAD NAME, WHICH M AY RESULT IN REDUCTION OF BUSINESS. SUB-STANDARD MATERIAL WILL N ATURALLY COST LESSER TO THE ASSESSEE BUT THE ASSESSEE HAS FAILED TO ESTABLISH THAT PURCHASES OF RAW MATERIAL LESSER THAN THE MARKET RA TE, WERE EVER MADE BY IT. IT WILL NOT BE OUT OF PLACE TO MENTION HERE THAT RAW MATERIAL WAS PURCHASED FROM RELIANCE INDUSTRIES ALS O BY THE ASSESSEE AND IT CAN BE NEVER BE DREAMT OF THAT RELI ANCE INDUSTRIES MAY SALE SUB-STANDARD MATERIAL. D THE CONSUMPTION OF POWER FOR DIFFERENT PRODUCT H AS NOT BEEN ESTABLISHED BY THE ASSESSEE AS NO PRODUCTION RECORD FOR EACH MACHINE HAS BEEN MAINTAINED BY THE ASSESSEE. E THE CLOSING STOCK SHOWN BY THE ASSESSEE FOR SCRA P IS CLAIM AS 50 KG BUT FOR THE MONTH WISE & STAGE WISE PRODUCTIO N THE GENERATION OF SCRAP IS NOT ESTABLISH WITH THE HELP OF DOCUMENT ARY EVIDENCE. B. THE MANUFACTURING RECORD HAS NOT PROPERLY BEEN M AINTAINED BY THE ASSESSEE AND AS ADMITTED BY THE ASSESSEE THE FI GURES GIVEN DURING THE COURSE OF HEARING ARE PURELY ON ESTIMATE BASIS. THEREFORE, I AM NOT IN THE A POSITION TO WORK OUT T HE ACTUAL PRODUCTION MADE BY THE ASSESSEE. ACCORDINGLY, I HAV E NO OPTION BUT TO APPLY THE PROVISIONS OF SECTION 145 OF THE ACT. C. THE CART REFERRED AT PARA-2 ABOVE INDICATE THAT IN THE MONTH OF JUNE 2002, THE CONSUMPTION OF POWER WAS 3860 UNITS AGAINST WHICH LABAOUR PAYMENT WAS 16442. THE PRODUCTION WAS LEAST DURING THIS MONTH IN THE WHOLE YEAR I.E. 630 KG ONLY WHICH GAVE THE RATE OF 0.16 KG PER UNIT. WHEN THE PRODUCTION WAS LEAST THE LABO UR EXPENSES WERE CLAIMED AT RS.16,442/-. IN THE MONTH OF MARCH 2003 LABOUR PAYMENT WAS RS.14,752/- WHILE PRODUCTION WAS 123179 .100 KG WHICH IS MORE THAN 19 TIMES THAN JUNE 2002. THE PAY MENT OF LABOUR CHARGES CLAIMED BY THE ASSESSEE IS AT HIGHER RATE I N THE MONTH OF JUNE 2002 (DESPITE LESSER PRODUCTION) THAN MARCH 20 03 FURTHER SUPPORTS MY VIEW THAT PROVISIONS OF SECTION 145 ARE CLEARLY APPLICABLE IN THIS CASE. AFTER GIVING CREDIT @ 40% FOR FACTORS SUCH AS BREAK DOWN, RECYCLING OF SCRAPS ETC. THE ASSESSING OFFICER WORKED OUT THE FIGURE OF 58,863 UNITS OF POWER CONSUMPTION FOR THE WHOLE YEAR ON THE BASIS OF THE FIGURES FURNISHED BY ITA NO.2237/AHD/2007 A.Y. 2003-04 M/S.NILO PLAST V. ITO WD-2(2), BRD PAGE 5 ASSESSEE. TAKING THE PRODUCTION RATE OF 1.75 KG PER UNIT CONSUMPTION OF POWER FOR THE MONTH OF JAN03 AS THE BASIS, THE AO WORKED OUT THE FIGURE 21,994.94 KG AS SUPPRESSED PRODUCTION. THE UNRECORD ED SALES WERE WORKED OUT AT RS.15,92,461/- ON PROPORTIONATE BASIS. NO SE T OFF FOR EXPENSES WAS GIVEN BY THE AO ON THE GROUND THAT ALL THE EXPENSES WERE CLAIMED IN THE RETURN OF INCOME. ACCORDINGLY, AN ADDITION OF RS.15 ,92,461/- WAS MADE TO THE INCOME OF ASSESSEE WHILE OBSERVING AS UNDER:- VII. NOW, I PROCEED TO WORK OUT THE PRODUCTION ON THE BASIS OF INFORMATION SUPPLIED BY THE ASSESSEE VIDE ITS REPLY DATED 09.03.2006 ON THIS BASIS THE CHART AS REFERRED AT PARA 11 ABOVE W AS PREPARED. PERUSAL OF THIS CHART INDICATES THAT I THE MONTH OF JANUARY 2003 CONSUMPTION OF POWER WAS 6940 UNITS WHICH RESULTS INTO PRODUCTION OF 12111.600 KG. THE PRODUCTION RATE PER UNIT WORKS OUT TO 1.75 KG P ER UNIT. HOWEVER, THIS POINT NEEDS CONSIDERATION HAT WHEN A PARTICULAR MAC HINERY IS NOT USED FOR REGULAR BASIS IT MAY NEED MORE CONSUMPTION OF P OWER TO RESTART. THE PROCESS OF PRODUCTION AS DISCUSSED WITH THE ASSESSE E IS THAT, FIRST THE RAW MATERIAL IS GET MELTED IN THE HEATER AND THEN L IQUEFIED MATERIAL IS, PASSED THROUGH THE DIES. TO BRING THE HEATER AT THE OPTIMUM TEMPERATURE AT THE TIME OF START WILL NATURALLY NEE D SOME MORE CONSUMPTION OF POWER THAN IT WOULD HAVE CONSUMED IN THE REGULAR PROCESS OF PRODUCTION. THOUGH THE ASSESSEE HAS PREP ARED THE PRODUCTION DETAILS ON ESTIMATE BASIS BUT THE PERUSA L OF MONTH WISE PRODUCTION CHART FILED BY THE ASSESSEE INDICATE THA T SOME OF THE ITEMS WERE INTERMITTENTLY STOPPED PRODUCTION. IN ADDITION TO IT BREAK DOWN IF ANY AND RECYCLING OF SCRAP ASSESSMENT PROCEEDINGS C LAIMED BY THE ASSESSEE, THOUGH NOT ESTABLISHED BUT THEIR OCCURREN CE CAN NOT BE DENIED, MAY BE GIVEN SOME CONSIDERATION. KEEPING IN VIEW THE ABOVE FACTORS CONSUMPTION OF POWER IN THESE ITEMS IS ESTI MATED AT RATE OF 40%. THUS, THE TOTAL CONSUMPTION OF UNITS AS REFERRED AT PARA II ABOVE I.E. 98105 IS REDUCED BY 40% WHICH WILL GIVE A REDUCTION OF 39242 UNITS THAT MEANS 98105 -39242 UNITS = 58863 UNITS OF POWER WER E UTILIZED IN PRODUCTION. THE PRODUCTION RATE AS DISCUSSED ABOVE I.E. 1.75 KG PER UNIT IF APPLIED TO THE CONSUMPTION OF UNITS WILL GIVE TH E PRODUCTION AT 103010.25 KG AS AGAINST 81015.310 KG SHOWN BY THE A SSESSEE, LEAVING A DIFFERENCE OF 21995.94 KG. THE RATIO BETWEEN THE TOTAL PRODUCTION AND PRODUCTION NOT SHOWN BY THE ASSESSEE WORKED OUT ABO VE IS 81015.310 : 21994.94 I.E. 3.68: 1. TOTAL SALES ARE SHOWN BY THE ASSESSEE AT RS.58,60,259. IF THE RATIO WORKED OUT ABOVE IS APPL IED TO THE SALES THE UNRECORDED SALES WILL BE 5860259 / 3.68 = 1592461. THE ASSESSEE HAS SHOWN THE PRODUCTION IN METERS AND KGS SALE IN TERM S OF KGS IS NOT GIVEN BY THE ASSESSEE THEREFORE THE RATIO OF PRODUCTION I N KG IS APPLIED TO THE SALES SHOWN IN RUPEES. FURTHER, IT IS PRESUMED THAT THE PRODUCTION WHICH HAS NOT BEEN RECORDED WAS SOLD OUT BY THE ASSESSEE. SINCE THE ITA NO.2237/AHD/2007 A.Y. 2003-04 M/S.NILO PLAST V. ITO WD-2(2), BRD PAGE 6 ASSESSEE HAS ALREADY CLAIMED ALL THE EXPENSES IN IT S RETURN NO FURTHER SET OFF WILL BE GIVEN FOR ANY TYPES OF EXPENSES. TH E ASSESSEE HAS SOLD THE UNRECORDED PRODUCTION AMOUNTING RS.1592461/- BU T NOT OFFERED IT FOR TAX IN ITS RETURN OF INCOME. THEREFORE, THE SAID AM OUNT IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. SINCE THE ASSESSEE HA S FIELD INACCURATE PARTICULARS OF INCOME WITH A VIEW TO CONCEAL INCOME AND EVADE TAX, PENALTY PROCEEDINGS U/S.271(1) ARE INITIATED AGAIN ST THE ASSESSEE. AGGRIEVED BY THIS ORDER ASSESSEE WENT IN APPEAL BEF ORE LD. CIT(A). 4. BEFORE LD CIT(A), IT WAS SUBMITTED THAT ALL THE DETAILS AS REQUIRED BY ASSESSING OFFICER WAS DULY SUBMITTED DURING THE ASS ESSMENT PROCEEDINGS AND THAT COMPLETE QUANTITATIVE RECORDS WERE MAINTAINED BY ASSESSEE. IT WAS FURTHER SUBMITTED THAT AO HAS THEORETICALLY WORKED OUT THE PRODUCTION PER UNIT OF POWER CONSUMED WITHOUT TAKING INTO ACCOUNT THE P OWER CONSUMED FOR PRODUCTION IN RESPECT OF JOB WORK CARRIED OUT FOR O THER PARTIES. RELIANCE IS ALSO PLACED ON THE GROSS PROFIT AND NET PROFIT RATES OF THIS YEAR AND EARLIER YEARS STATING THAT THEY WERE COMPARABLE. THE LD COUNSEL F OR ASSESSEE ALSO SUBMITTED THAT ADDITION ON ACCOUNT OF UNRECORDED SA LES BASED ON CONSUMPTION OF ELECTRICITY WITHOUT POINTING OUT ANY COMPARABLE CASES WAS UNWARRANTED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 1. SHABNAM MARBLES (P) LTD. V. ACIT 125 TAXMAN 139 (JAIPUR) 2. ITO V. GOBIND STEEL ROLLING MILLS 54 TAXMAN 72 (CHD.) 3. MILAP TEXTILE MILLS V. DCIT 86 TTJ 125 (JD) 4. UDHMI RAM V. ITO 88TAXMAN 191 (AMR.) 5. ITO V. SOMSONS & CO. 148 TAXMAN 21 (ASR.) 6. ITO V. SATYANARAYAN PAREEK 71 TTJ 997 (GAU) 7. ITO V. GARG 51 TTJ 212 (CHD) 8. ACIT V. KHAMBHATA FAMILY TRUST 67 ITD 411 (AHD) TAKING INTO CONSIDERATION THE SUBMISSION OF ASSESSE E LD. CIT(A) GAVE PARTIAL RELIEF BY OBSERVING AS UNDER:- ITA NO.2237/AHD/2007 A.Y. 2003-04 M/S.NILO PLAST V. ITO WD-2(2), BRD PAGE 7 4.3.7. AS REGARDS ESTIMATION OF SUPPRESSED SALES T HE ASSESSING OFFICER HAS GIVEN CREDIT TO THE APPELLANT @ 40% FOR CERTAIN FACTORS AS MENTIONED AT PAGE NO.9 OF THE ASSESSMENT ORDER. HOWEVER, I INTEND TO THE AGREE WITH THE LD. COUNSEL THAT CREDIT FOR CONS UMPTION OF ELECTRICITY FOR PRODUCTION IN RESPECT OF JOB WORK CARRIED-OUT B Y THE APPELLANT HAS NOT BEEN GIVEN. THE ASSESSING OFFICER IS, THEREFORE, DI RECTED TO RE-COMPUTE THE FIGURE OF SUPPRESSED SALES AFTER DUE CREDIT FOR PRODUCTION ON ACCOUNT OF JOB WORK AFTER VERIFICATION. THE ADDITION, SUBJE CT TO RE-COMPUTATION AS STATED ABOVE, IS THEREFORE, CONFIRMED. FURTHER, AGGRIEVED NOW ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSES SEE REITERATED THE SAME SUBMISSION AS MADE BEFORE LOWER AUTHORITIES. HE ALS O PLACED RELIANCE ON CERTAIN CASE LAWS TO THE PROPOSITION THAT ON THE BA SIS OF ELECTRICITY CONSUMPTION/FUEL CONSUMPTION/ BOOKS OF ACCOUNT CANN OT BE REJECTED. HE ALSO ARGUED THAT GROSS PROFIT RATE AS WELL AS NET PROFIT RATE OF ASSESSEE IS HIGHER DURING THE YEAR UNDER APPEAL IN COMPARISON TO LAST THREE PRECEDING YEARS. HE THEREFORE CONCLUDED HIS ARGUMENT BY PRAYING THAT BO OK RESULTS SHOWN BY THE ASSESSEE MAY KINDLY BE ACCEPTED. 6. LD. SR- DR ON THE OTHER HAND RELIED ON THE ORDER OF LOWER AUTHORITIES AND FURTHER SUBMITTED THAT REJECTION OF BOOK RESULT HAS NOT BEEN CHALLENGED BY THE ASSESSEE IN ITS GROUND OF APPEAL AND THEREFORE CASE LAWS NOW RELIED BY THE ASSESSEE ARE NOT RELEVANT FOR DECIDING THE APPE AL OF THE ASSESSEE. HE THEREFORE PRAYED THAT ORDER PASSED BY LOWER AUTHORI TIES MAY KINDLY BE ALLOWED. 7. HEARD BOTH THE PARTIES AND PERUSED THE RECORD AN D FIND THAT THERE IS NO DISPUTE THAT PRODUCTION FIGURES FURNISHED BY ASSESS EE DURING THE ASSESSMENT PROCEEDINGS WERE BASED ON ESTIMATE AS NO DAY-TO-DAY RECORD OF STOCK WAS KEPT BY THE ASSESSEE. THE OTHER FINDINGS OF ASSESSI NG OFFICER WHICH HAVE BEEN REPRODUCED BY US AT PARA-3 OF THIS ORDER HAVE REMAINED UN-CONTROVERTED. WE FURTHER FIND THAT WHILE ESTIMATING THE SUPPRESSE D SALES OF ASSESSEE, AO ITA NO.2237/AHD/2007 A.Y. 2003-04 M/S.NILO PLAST V. ITO WD-2(2), BRD PAGE 8 HAS GIVEN CREDIT TO THE ASSESSEE @ 40% FOR CERTAIN FACTORS SUCH AS BREAK DOWN, RECYCLING OF SCRAP ETC. SIMILARLY LD. CIT(A) HAS BEEN QUITE REASONABLE IN DIRECTING THE AO TO RE-COMPUTE THE FIGURES OF SUPPR ESSED SALES AFTER DUE CREDIT FOR PRODUCTION ON ACCOUNT OF JOB WORK. SINCE NO GRO UND IS TAKEN BY ASSESSEE IN RESPECT OF REJECTION OF BOOKS OF ACCOUNTS U/S 14 5 OF THE ACT BY AO THE CASE LAWS NOW RELIED BY THE ASSESSEE ARE NOT RELEVANT WH ILE DECIDING THIS ISSUE. IN VIEW OF THE ABOVE THE GROUND OF ASSESSEES APPEAL I S DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 06/05/2011 SD/- SD/- (A.N.PHAUJA) (D.K. TYAGI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 06/05/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-II, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD